BANK VERIFICATION NUMBER: IMPLICATION ON THE NIGERIAN ECONOMY AND BANKING SECTOR
CHAPTER ONE OF BANK VERIFICATION NUMBER, IMPLICATION ON THE NIGERIAN ECONOMY, AND INTRODUCTION TO THE BANKING SECTOR
1.1 BACKGROUND OF THE STUDY
The importance of BVN in mitigating the risks connected with social security and credit risk cannot be overstated (Leland & David, 1977). Biometric technology have recently been utilised to analyse human attributes as an improved form of authentication for real-time security operations.
In light of rising occurrences of compromise on our traditional security measures (password and PIN), increased security on access to sensitive or personal information in the banking system is unavoidable (Blass & Oved, 2003).
Similarly, the extent to which violations in credit regulations and credit monitoring systems weaken the financial intermediary system continues to attract empirical and theoretical discussion on how well Bank Verification system will thwart default and scam issues.
In order to address existing difficulties with identity management, the Central Bank of Nigeria, in partnership with all Nigerian banks, launched a centralised biometric identification system dubbed “Bank Verification Number (BVN)” on February 14, 2014.
The BVN provides each bank customer in Nigeria with a unique identity that may be utilised for quick identification and verification at the point of banking activities (Evangelista et al, 2001).
Biometrics is the identification of an individual based on physiological or behavioural characteristics such as a fingerprint, voice, signature, or face traits.
BVN registers consumers in the banking system using biometric technologies. It records physical characteristics that are unique to individuals, such as fingerprints and facial traits. The record would then be utilised to identify the individual (Diamond, 1991).
Once a person's biometrics have been registered and a BVN has been issued, the account can be accessed through BVN. The initiative's main goals are to safeguard bank customers, reduce fraud, and enhance the Nigerian banking sector.
People who are unable to read or write can benefit from biometric enrollment. Their finger prints and photographs would function similarly to signatures (Claudio, 2002). A single registration would cover multiple account holders in any of the banks where they have accounts.
BVN will assist the banking sector in reducing circumstances in which loan defaulters, for example, migrate from one bank to another and new credit is extended to them without knowing their history. Banks would be able to more easily track transactions across all Nigerian banks.
As the CBN executes the BVN project, it must assure data security, both from unscrupulous bankers and, more crucially, from harm, as has been the case in other sectors that have engaged in biometric enrolment. It should also enact penalties for banks that use the information they have to extort clients with whom they disagree.
With the usage of BVN, customers' bank accounts are protected from unauthorised access. The threat of unauthorised access to a customer's bank account is mitigated by an upgraded biometric real-time security system.
The BVN is comprehensive in detecting fraud of any kind, whether through unauthorised access or illegally authorised forms, as well as any other types of fraud that violate the rule of law and social justice (De Meza & David, 2000).
It will be of significant advantage to the Nigerian economy as she embarks on a path to effective transaction delivery via the BVN, regardless of differences in opinion, detractors, or faults that may arise during the project's implementation.
Customers who borrow from one bank and default would not be able to borrow from another bank without being tracked due to a unified credit performance system as Credit Bureau and lenders would be able to implement the CBN's ”Know Your Customer (KYC)” policy, and fraudulent activities would be curtailed and banking activities would be appropriately monitored.
1.2 STATEMENT OF THE problem
BVN is a fantastic effort that would reduce unlawful banking activities while also improving national financial information collecting, hence boosting the economy. Account holders' interests should be prioritised so that their improved trust in the banking system improves banks' financial standing.
Customers will utilise banks more frequently if they know their transactions are secure. BVN provides numerous chances to safeguard clients, institutions, and the entire financial system.
The researcher, on the other hand, is investigating the impact of Bank verification number BVN on the Nigerian economy and banking sector.
1.3 OBJECTIVES OF THE STUDY
The following are the study's objectives:
To investigate the impact of the Bank Verification Number (BVN) on the Nigerian economy.
To investigate the impact of Bank Verification Numbers (BVNs) on the Nigerian banking sector.
To identify the threats and vulnerabilities of the Bank Verification Number BVN implementation.
1.4 RESEARCH QUESTIONS
What effect does the Bank Verification Number BVN have on the Nigerian economy?
What impact does the Bank Verification Number BVN have on the Nigerian banking sector?
What are the threats and weaknesses of the Bank Verification Number (BVN) implementation?
HO: There is no link between Bank Verification Number and the Nigerian economy.
HA: There is a strong link between Bank Verification Number and the Nigerian economy.
1.6 SIGNIFICANCE OF THE STUDY
The following are the study's implications:
The findings of this study will inform the general public on the benefits and implications of Bank Verification
Numbers, as well as their impact on the Nigerian economy and banking sector.
This study will contribute to the body of literature on the effect of personality traits on student academic
achievement, forming the empirical literature for future research in the field.
1.7 SCOPE AND limitations OF THE STUDY
This research will look into the difficulties surrounding Bank Verification Numbers and their impact on the Nigerian economy and banking sector.
Financial constraint- A lack of funds tends to restrict the researcher's efficiency in locating relevant materials, literature, or information, as well as in the data collection procedure (internet, questionnaire, and interview).
Time constraint- The researcher will conduct this investigation alongside other academic activities. As a result, the amount of time spent on research will be reduced.